COMMITTEE FOR THE ENVIRONMENT

OFFICIAL REPORT

(Hansard)

Local Government (Miscellaneous Provisions) Bill

25 June 2009

Members present for all or part of the proceedings:

Mr Patsy McGlone (Chairperson)
Mr Cathal Boylan (Deputy Chairperson)
Mr Roy Beggs
Mr Trevor Clarke
Mr David Ford
Mr Tommy Gallagher
Mr Danny Kinahan
Mr Ian McCrea
Mr Daithí McKay
Mr Alastair Ross
Mr Peter Weir

Witnesses:

Ms Julie Broadway )
Mr Ivan Gregg ) Department of the Environment
Mr John Murphy )
Mr Jim Stewart )

The Chairperson (Mr McGlone):

We are joined by Julie Broadway, principal grade 7 in the Department of the Environment’s local government policy division; Jim Stewart, deputy principal in the local government policy division, and John Murphy, deputy principal in the local government policy division; and Ivan Gregg from the Department’s planning and environmental policy group.

Before we begin, I declare an interest as a member of Cookstown District Council.

Mr Beggs:

I declare an interest as a member of Carrickfergus Borough Council, and I acknowledge that my dad is also a member of Larne Borough Council.

Mr Kinahan:

I declare an interest as a member of Antrim Borough Council.

Mr McKay:

I declare an interest as a member of Ballymoney Borough Council.

Mr Ford:

I declare an interest as a member of Antrim Borough Council.

Mr Weir:

I declare an interest as a member of North Down Borough Council. I am also a member of the transition committee for Ards and North Down. Although this may be slightly tangential, I am a member of policy development panel A, which has been looking at the governance of the transitional arrangements.

Mr I McCrea:

I declare an interest as a member of Cookstown District Council. I also sit on the transition committee for the proposed new Mid Ulster council.

Mr T Clarke:

I declare an interest as a member of Antrim Borough Council.

The Chairperson:

I ask you to give us an overview of the Local Government (Miscellaneous Provisions) Bill, Julie, and then to deal with any queries from Committee members.

Ms Julie Broadway (Department of the Environment):

First, I will point out our areas of responsibility. Jim Stewart has been dealing with the contracts provisions; John Murphy has been dealing with the transition committees; and Ivan Gregg can deal with any queries that Committee members may have about the waste applications in the Bill.

As the Committee will be aware, the Bill will clarify councils’ powers to enter into long-term service contracts with the private sector, and so remove any concerns that contractors and financiers may have about such contracts. It will also enable councils to acquire land otherwise than by agreement for waste-management purposes.

The Bill will also enable the Department to make some preliminary arrangements for the reorganisation of local government in the run-up to 2011, in advance of a main local-government reorganisation Bill. The Bill will provide for severance arrangements for councillors, for the establishment of statutory transition committees to prepare for and assist with the reorganisation of local government. It will also introduce a system of controls by means of direction over disposal of land and contracts entered into by existing councils.

The provisions on contracts were originally included in a draft Local Government (Contracts and Compulsory Purchase) Bill. Consultation on the draft Bill was carried out from December 2008 to March 2009. The synopsis of responses to that consultation and the Department’s response to those responses were forwarded to the Committee in April 2009. On the reorganisation provisions, when we last briefed the Committee in April 2009, we explained that the provisions on severance and the transition committees, which we had originally intended to include in the draft Local Government (Finance) Bill, were to be added to the Local Government (Miscellaneous Provisions) Bill owing to timing issues.

The Department carried out separate consultations on the proposed arrangements for the establishment of transition committees and for severance arrangements between April and May 2009, and a synopsis of the responses to both those consultations was sent to the Committee earlier this month. Therefore, the Bill as introduced in the Assembly now contains provisions on statutory transition committees, and it will provide for regulations to make provision for their membership, procedures, governance arrangements and functions.

The Bill also contains an enabling provision to allow the Department to make regulations for a scheme to allow severance payments to be made to councillors who do not stand for re-election.

The briefing material that we recently forwarded to the Committee included a memorandum of delegated powers to provide more information on what the enabling powers will be used for. Over the summer months, we intend to work on what the regulations will include.

A provision has recently been added to the Bill to allow the Department to issue directions to existing councils as a means of control so that, in the lead up to reorganisation, they will not be able to dispose of land or enter into capital contracts above specified values unless they have the consent of their statutory transition committee. The Minister wrote to the Committee to let you know about his decision to include the control provisions in the Bill, and you were originally briefed on the matter when we briefed the Committee on the draft Local Government (Finance) Bill.

Those provisions were moved into the Local Government (Miscellaneous Provisions) Bill because of timing. The finance Bill is not expected to come into operation until autumn 2010, and that would mean that the controls regime would be able to apply only for a short period before reorganisation and, therefore, would not be very effective. The provisions were moved to allow for their earlier introduction and in response to the growing concerns, of which officials had become aware through their dealings with the voluntary transition committees, the transition management teams and the local government sector in general, that suitable controls on financial arrangements would need to be in place for the final year of the old councils’ existence.

It was not possible to carry out full public consultation on the proposals to include those financial controls before the Bill was introduced in the Assembly. I appreciate that that is not an ideal situation. However, before the Department makes any directions about the controls, we will engage with political parties and with councils’ transition committees and transition management teams to obtain their views, and we will also return to the Committee on the matter before any decisions are reached about what will be included in those directions. I am now happy to take questions.

Mr Weir:

You mentioned the Bill’s proposals for the control and disposal of contracts. I understand the logic behind introducing a requirement for existing councils to gain permission for the disposal of contracts above a certain capital limit.

The Bill also contains provision to cover vesting issues surrounding bodies corporate of the waste groups. I presume that the proposed legislation for the control and disposal of contracts of existing councils refers to restrictions on the individual councils and that it is not meant to apply to waste groups that involve a number of councils. Is the legislation intended to provide a check and balance to prevent a council from entering into contracts to build £100 million or £200 million worth of projects before someone else has control over that?

Ms Broadway:

Yes, it is intended to prevent an existing council from committing a new council to a contract.

Mr Weir:

The legislation would not apply, for example, to bodies corporate of waste groups.

Mr Jim Stewart (Department of the Environment):

As drafted, the provisions in clause 19 do not apply to either Arc21 or the Southern Waste Management Partnership (SWaMP2008). It may be more appropriate for Ivan Gregg to talk from the waste perspective. In their body-corporate orders and their memorandums of agreement, they need the consent of the constituent councils to enter into contracts. To include Arc21 and SWaMP in the legislation would be to take a belt-and-braces approach, but, they are not included in the Bill is drafted, so they are under no obligation.

Mr Ivan Gregg (Department of the Environment):

We are having some discussions with the waste-management groups on those provisions. It may be that they will voluntarily put their contracts past the transition committees. As the Bill is drafted, the two bodies corporate are excluded. That is a slightly different situation, because consensus is required between councils and the waste-management groups before a contract can be signed. Urgency is also required in getting the contracts out. Different factors are to be considered, and we are asking the waste-management groups for their views on whether they feel that their inclusion would be appropriate.

Mr Weir:

I am not 100% clear on the situation, but I see that joint committees are referred to at clause 19. You mentioned SWaMP2008 and Arc21. What is the legal position of the North West Region Waste Management Group (NWRWMG), because I notice that you have not mentioned it?

Mr Gregg:

The NWRWMG could be caught, should directions include that group. As it stands, only the bodies corporate — that is, SWaMP2008 and Arc21 — are excluded.

Mr Weir:

Leaving aside the exclusion aspect, I am not overly familiar with the NWRWMG, but clause 19 states that there are provisions to certain joint committees constituted as bodies corporate, and those provisions give joint committees a similar power to councils over contracts, acquisition of land and vesting. What is the NWRWMG’s position? Obviously, the group is not included under the provisions.

Mr Gregg:

It is not included.

Mr Weir:

Is it covered anywhere else?

Mr Gregg:

The NWRWMG is essentially a lead counsel, and the contract will be issued by Derry City Council. Therefore, the group will be caught as a council.

Mr Weir:

I will return to the acquisition provisions in a moment.

Clause 14 refers to the constitution of statutory transition committees. The Department clearly has enabling powers to introduce more detailed regulations. The Bill will take some time to become law. As soon as the legislation is enacted, do you anticipate being in a position to be able to introduce regulations? Is the preparation work being done so that the regulations can effectively hit the ground running? I know that a process must be gone through, but, presumably, you do not anticipate any delay between the passing of the Bill and the introduction of regulations, which give the detail of the powers involved?

Mr John Murphy (Department of the Environment):

No, we intend for the regulations to be drafted so that they are ready to go through the necessary processes when the Bill receives Royal Assent. The intention is that they can become operational at the earliest opportunity.

Ms Broadway:

Over the next couple of months, we will use the opportunity to work on the various enabling powers and regulations that will be required under the Bill so that by the time that the formal Committee Stage starts, we will have a fair idea of the intention behind the regulations.

Mr Weir:

Finally, will you tell us briefly about the vesting powers on the acquisition side but give us more detail on their scope and restrictions? For example, if you are saying that vesting powers for waste and contaminated land are clearly for waste-management purposes, can someone determine whether vesting powers will be used for the right purpose? I acknowledge that in most cases it will be a clear-cut determination. What is the restriction on where, or from whom, any council or group can vest land? I need more detail on that.

Mr Gregg:

Details laid down in the Local Government Act 1972 control the compulsory acquisition of land, and those would be applicable in this case. The council or body corporate would have to seek the Department’s approval and inform stakeholders, local residents and people who own adjacent land. If there were objections to that compulsory acquisition, the Department could then hold a public inquiry.

Mr Weir:

Can both private land and public land be acquired? Can the council seek to acquire land from another Department, for example?

Mr Gregg:

I cannot answer that, because I am not aware of the precise details.

Mr Weir:

Perhaps you will get back to us on that issue. It may be the elephant in the room, because, in the Bill as drafted, the power that a waste body has can also apply to a body corporate.

Mr Stewart:

The powers will enable councils to acquire private and public lands, assuming that the public body is —

Mr Weir:

Hypothetically, that could enable a waste group, for example, to seek to vest land that belongs to one of the existing 26 councils, perhaps even one that was a member of that waste group. I accept that that is a fairly absurd example to give.

Mr Ford:

Land could even be vested from a council that had opposed the proposal.

Mr Weir:

Yes. Whatever the rights and wrongs of an individual case, technically, that could happen.

Mr Beggs:

Spit it out, Peter. He wants to know whether Arc 21 will be able to vest land from Belfast City Council.

Mr Weir:

North Down Borough Council may seek to earn £20 million that way.

Mr Gregg:

Waste-management groups operate on the basis of consensus. Therefore, all constituent councils would have to agree to the proposal.

Mr Weir:

Do all waste-management groups operate on the basis of consensus?

Mr Gregg:

My understanding is that, to operate, waste-management groups must have the agreement of all councils.

Mr Ford:

However, the representatives of a particular council might be part of the consensus, but a majority of the council could have a different view.

Mr Weir:

Mr Gregg, is your understanding that, for a waste-management group to take any action, the councils must agree unanimously?

Mr Gregg:

Yes. However, if a number of councils agreed that the vesting should proceed but others disagreed, the matter would, ultimately, come before the Assembly for a decision.

Mr Weir:

I am not quite sure what you mean.

The Chairperson:

Could it come before the Executive?

Mr Stewart:

It must come before the Assembly and be passed by resolution. We can get back to the Committee on that point.

Mr Weir:

That would be helpful, because it may become more than a hypothetical situation.

Mr Gallagher:

Will you elaborate on the Department’s intention to replace the voluntary transition committees with statutory transition committees? It appears that the Department intends to use the statutory transition committees to set the rates for the new councils post-2011. It would be fine for an outgoing Assembly Committee to leave a set of directions for an incoming Assembly Committee in the next mandate.

Does the Department intend the staff appointments to be on a permanent or interim basis? Under the Bill, will the Department appoint all staff or only particular categories of staff?

Mr J Murphy:

The striking of the rate by the statutory transition committee would apply only to the first year of the new council’s operation, in order to ensure that it had an operating budget. I suspect that the incoming council would have to examine that budget to determine whether it met its requirements, and it may want to consider certain areas. However, the incoming council must have a budget within which to work. After the first year, the new council will determine the rate.

Mr Weir:

Although different people may be taking the decision, the process is not particularly different. Had there been no review of public administration (RPA) and an election to Fermanagh District Council, for example, were due to take place in 2011, a new council would be in place in that year. However, the outgoing council would have set the new council’s budget for 2011-12 as part of the rates process around February.

Mr J Murphy:

The same principle applies.

Mr Gallagher:

The point is that the personnel and mandate are different.

Mr Weir:

Yes, but the same would happen in any council.

Mr J Murphy:

At this stage, the appointment of staff will be limited to a chief executive designate and two senior managers, who will be the director of finance and the director of human resources. The transition committees will need only a limited number of staff in place to support them in ensuring that the new councils will be ready to operate four days after the election.

Mr Gallagher:

What about the voluntary and statutory transition committees?

Mr J Murphy:

The voluntary transition committees will operate until the regulations are laid before the Assembly and approved. There will then be moves to create the statutory transition committees.

Mr Gallagher:

Will the methods that were applied for the selection of the voluntary transition committees be the very same as those that you intend to apply to the statutory committees, or do you foresee the need for any changes, given that we have all had a flavour of the way in which the appointments to the statutory transition committees work? In other words, do you see any necessity for safeguards to be inserted, given what you have seen so far?

Mr J Murphy:

As the Department indicated in the consultation, we are looking to provide a range of options for councils to determine their representation. Therefore, d’Hondt, Sainte-Lague or the single transferable vote (STV) will be used. We intend to set out in the regulations how those processes would operate in order to achieve consistency across councils. Therefore, those councils that choose to use d’Hondt, for example, would all apply the same methodology.

Mr Ford:

I notice that clause 1(3) states:

“This Part applies to any contract which a district council enters into after 22nd June 2009.”

What is that point of that subsection?

Mr Stewart:

There was a possibility of waste contracts, with which I am not totally familiar, coming in fairly early. Clause 1(3) is to allow for early negotiations and agreements to enter into contracts at the time of introduction. It would appear now that no certified contracts have been entered into. Therefore, that subsection is not really to have any effect at the moment. However, it was to allow a council now to enter into a certified contract.

Mr Ford:

It appears to me that the type of contract about which you are talking would today be ultra vires. A council might enter into a contract in the hope that, when the Bill becomes an Act, the contract would then be retrospectively approved. That does not sound like terribly good legislation.

Ms Broadway:

That may be something at which we can look again.

Mr Stewart:

Yes, OK. The clause was obviously introduced on the understanding that the legislation would come into force.

Mr Ford:

I think that there is such a thing as the assumption that the legislature will decide what the legislation does, and it appears to me that clause 1(3) is attempting to go beyond that.

Will there be a statutory transition committee for the new City of Belfast Council, or whatever it is to be called?

Mr J Murphy:

Yes, it will have a statutory transition committee.

Mr Ford:

In that case, what is the position of those who represent the fairly substantial but minority areas of Lisburn and Castlereagh, which are likely, on the presumption that the final report of the Boundaries Commissioner confirms what we already know, to be incorporated into the new Belfast council? However, since the definition of a “predecessor council” in clause 9(2)(b) means that it has to be:

“the whole or the major part of the district of the existing council”,

Councillors in Lisburn or Castlereagh, as the Bill is drafted, will have no say whatsoever in the new Belfast council.

Mr J Murphy:

The representation from those areas is an issue that is being raised in the consultation. We will need to give further consideration to that.

Mr Ford:

Is it not, therefore, inappropriate that the Bill as drafted uses that definition of “predecessor council”?

The Chairperson:

That is a fair point.

Mr Ford:

Unfortunately, the long silences before you answered my questions will not be noticeable in the Hansard report. However, by pointing that fact out, it will now be noted.

The Chairperson:

Has there been any response from the Department on that?

Ms Broadway:

We will get back to the Committee with the reasons why that committee was set up in that way and why the local government districts as specified in the Local Government (Boundaries) Act ( Northern Ireland) 2008 were used.

Mr Ford:

The position is quite clear: all existing councils in the outer suburbs of Belfast, with the small exception of the area around Banbridge, will form new authorities. However, the Bill does not address the main issue affecting parts of Castlereagh and parts of Lisburn.

Ms Broadway:

We will get back to you on that.

The Chairperson:

We want to know the reason for that definition and what potential solutions there are to address it.

Mr Beggs:

Clause 16 deals with the statutory transition committees’ power to modify existing legislation. It seems that that clause will enable either local government legislation or rating legislation to make almost any regulation that is wishes. That is an excessively wide delegation of powers to be granted under the headings of “local government legislation” and “rating legislation”.

Ms Broadway:

The rating legislation, in particular, is mentioned because the practical implications of the issue of striking the rate for the first year are still being considered the Department of Finance and Personnel, the Department of the Environment and local government organisations. The clause allows us to make any necessary modifications to the current legislation in order to allow for whatever decision is reached on that issue to be taken forward.

Mr Beggs:

The terminology provides for any local government legislation. Presumably, that gives you a blank canvas to do what you want with regulations?

Ms Broadway:

Basically, it allows us to make and apply necessary changes to legislation.

Mr Beggs:

Will there be any consultation on the legislation that affects local government? The clause gives Government complete authority through primary legislation to change anything by way of regulation.

Ms Broadway:

The regulations will be consulted on and subject to affirmative resolution.

Mr Beggs:

Finally, when do you hope that the legislation will be applicable? I am thinking specifically about next January’s rating process. Are you proposing that the transition committees set the rates then?

Ms Broadway:

Yes.

The Chairperson:

If no other Committee members wish to ask any questions, that concludes our evidence session. Thank you for attending.